DrumBeat: August 12, 2008

NEW YORK — Robert Gilliland didn't think much about carpooling until gas prices got out of control. Now, he's happy to trade his motoring freedom for $120 in weekly savings.

Gilliland found one rider through the classifieds website Craigslist and another using the carpool-matching service eRideShare.com. Thousands of commuters like him have turned to the Internet to arrange shared rides as average gas prices hover around $4 a gallon.

It was welcome news to students when Brevard Community College in Cocoa, Florida, decided to experiment with a four-day work week. A year ago, as energy costs headed up and the school faced cuts in state funding, college President James Drake, who drives a hybrid, decided to give the shortened work week a try.

NEW YORK (Reuters) - TEPPCO Partners said it was halting liftings of low sulfur diesel from its Shreveport, Louisiana, terminal from Tuesday afternoon until August 21, according to a notice sent to shippers.

Opec last month pushed its production to the highest level in its 48-year history even as demand was slipping in the US and Europe, the International Energy Agency (IEA) said on Tuesday.

The combination of surplus supply and weaker demand has pushed oil prices to $113.50 a barrel, down 24 per cent in the past month and the lowest level since late April.

The effort was led by Saudi Arabia, which had come under increasing pressure for doing too little to compensate for lower supplies from countries outside Opec, where growth has been lacklustre as fields have aged in countries such as the UK and Mexico.

WASHINGTON - The Cold War competition between the United States and Russia — played out in Europe with the threat of mutual nuclear destruction — ended with the collapse of the Soviet empire nearly two decades ago.

But the Russian bear has re-emerged from its cave with a new and powerful weapon — the West's dependence on Moscow's vast energy supplies.

We agree that the Arctic National Wildlife Refuge, with its varied and sensitive ecosystems, should be preserved. In the quest for new sources of energy, there are trade-offs. That pristine area must remain off-limits. But there are three "truths" masquerading as fact among drilling opponents that need to be challenged...

Despite a recent dip in gas prices, energy still tops the issues in the US campaign. The Bush administration stirred the debate last week by refusing a request to reduce a mandate for more corn ethanol in gasoline. Even John McCain opposes this false notion that converting a vital food into fuel helps energy security.

Australia must move quickly to end its dependence on imported oil for transport to capitalise on the country's massive bank of alternative energy sources.

LPG should be the first step, followed by everything from compressed natural gas to hydrogen and even solar power for plug-in electric cars, according to the energy expert at the world's largest carmaker.

"If I did have that magic wand in Australia I would definitely focus on energy diversity," Larry Burns, the vice-president for planning at General Motors, said in Melbourne yesterday.

CALGARY — Petro-Canada warned Tuesday that problems at its Edmonton refinery may result in gasoline shortages at its stations in Alberta and parts of British Columbia.

The company said that a problem with a catalytic cracker at the 125,000 barrel per day refinery would lead to a shortfall in supplies. The company is working to fix the problem and is shipping gasoline from alternative sources.

“We are running on available inventories right now,” said Jon Hamilton, a spokesman for Petro-Canada. “We've communicated with other gasoline suppliers in the area ... to see if there is any available supply. We've also looked internationally.”

MONTREAL - The armed conflict between Russian and Georgia has further exposed the fragile position of the energy links running through the smaller country from the Caspian Sea to developed market economies.

Russian forces are placed to disrupt oil flows through the Baku-Tbilisi-Ceyhan (BTC) pipeline, which has carried Caspian Sea oil from Azerbaijan across Georgia to Turkey since 2006, and the Baku-Tbilisi-Erzerum pipeline, which opened last year and exports gas to Turkey, as well as the older Baku-Supsa "early oil" line that runs to the Georgian Black Sea coast.

As Russia's unnecessary, immoral and illegal military campaign in Georgia grinds onward, the world should not be fooled by President Dmitri Medvedev's claim that his troops are fighting "to restore peace to South Ossetia."

The Russian assault has very little to do with Georgian President Mikheil Saakashvili's ill-advised decision to send troops into that troubled region, and owes much more to Moscow's determination to control energy supplies in the Caucasus and strengthen its position as a near-monopoly supplier to Europe.

LONDON (Reuters) - The sudden outbreak of the Georgian conflict has left investors looking nervously at other economies in the region, with Ukraine and the Baltic states seen particularly exposed to a resurgent oil-rich Russia.

Russian equities and the rouble have already fallen on the conflict, while Georgia has faced credit ratings downgrades and is seen likely to suffer further economic fallout even if the actual fighting ends quickly.

"Going to war with Russia is bad for your creditworthiness, to put it mildly," said Edward Parker, head of emerging European sovereigns and ratings agency Fitch.

Amphibians, reigning survivors of past mass extinctions, are sending a clear, unequivocal signal that something is wrong, as their extinction rates rise to unprecedented levels, according to a paper published by the Proceedings of the National Academy of Sciences (PNAS). Humans are exacerbating two key natural threats – climate change and a deadly disease that is jumping from one species to another.

We have all seen by now the commercial where Boone Pickens warns that we "...cannot drill ourselves out of this energy crisis..." At the same time, the White House asked Congress to lift the ban on offshore drilling in the moratoria areas of the Outer Continental Shelf (OCS) and polls show that a large majority of the US population believes that offshore drilling can lower gasoline prices. To find out where the truth lies, let's look at some data so that we can decide if lifting the ban on OCS drilling is a sound business decision.

BP is waiting for an oil pipeline in eastern Turkey to cool before it can assess the damage after an explosion last week and has shut oil and gas pipelines across Georgia on security concerns.

...Damage assessments in Turkey "will probably start over the next day or two," Murat Lecompte, external affairs director for pipeline operator BTC Co., said in a telephone interview. "How long the assessment will take we don't know yet."

It's the same with everyone I speak to who's been watching the downward spiral of empire for any length of time: "I can't believe how fast things are unraveling", we all say to each other. The incessant mantra these days from people who haven't been paying attention is that "things are going to get better", but almost no one is denying that we are in uncharted waters beyond anything we've experienced since the Great Depression. The uninformed are traumatized, and traumatized people almost always revert to "it's going to get better" thinking in order to cope with their current plight.

I continue receiving emails from former students and former readers of Truth To Power which essentially state, "We thought you were a raving lunatic when you were telling us this stuff five years ago, but everything you said would happen is happening." Included in these comments are reports of foreclosures, bankruptcies, lost jobs, loss of student loan funding, medical bills that can never be paid off, applying for food stamps, regular trips to food banks, illnesses that cannot be treated because of lack of insurance or funds, depression, rage, profound ennui, and a sense of meaninglessness.

New Delhi (IANS) Minister of State for Coal Santosh Bagrodia Tuesday said there was no shortage of coal for power plants, and instead accused them of not maintaining 20 days’ stock as per norm.

‘Actually, there is no real shortage of coal for power plants. Wherever there is a shortage or delay in supply, it is because of infrastructure or law and order problems or sabotage,’ Bagrodia told reporters here.

(MENAFN - Jordan Times) Gas stations Monday were still struggling with a state of chaos with long lines of vehicles waiting to fill up amid a shortage of gasoline 90 (octane number) in the local market following a decision to lower fuel prices.

But concerned parties said the situation is expected to end soon and the demand-supply circle will be stabilised.

A shortage of electricity in the Northern Emirates and other GCC states will bankrupt many real estate developers if they fail to introduce private generation, says a top energy analyst.

Economist Dr Anas Alhajji, who toured the Gulf recently to determine the effects of power shortfalls in region, told Emirates Business the problem was likely to worsen and alternative measures would have to be taken to deliver projects.

A severe fuel shortage is hampering important life saving medical procedures at the Kilinochchi Hospital, according to a report published on Sri Lanka’s premier Tamil daily - Virakesari’s website.

Patients requiring respiratory therapies and ventilation also refrigeration needed for certain medicines - are depended on fuel using generators for electricity at the Kilinochchi hospital. Without sufficient stock of fuel, patients face life threatening dangerous situations and medicines worth several lakhs of rupees are feared to be spoiling, according to Virakesari report.

TRAVERSE CITY, Michigan (Reuters) - Toyota Motor Corp is considering exporting U.S.-made trucks including its full-size Tundra after scaling back its sales expectations for the U.S. market under pressure from record fuel prices and a slumping housing market.

Arthur Scargill is a brave man. He was brave to come to the climate camp at Kingsnorth last week. Though we disagreed with most of what he said, he earned our respect for his willingness to debate. He is brave to return to public life after suffering one of the nastiest vilification campaigns in British history, and is brave to be fighting for coal again. He is especially brave to offer to asphyxiate himself in the interests of science. Many people would be willing to help him perform this experiment at the earliest opportunity.

But he is also wrong. In his article last week demanding a return to coal and accusing me of selling out, Scargill suggested that radioactive discharges are more dangerous than carbon emissions. This, of course, is nonsense; but if he really believes it he should be campaigning against the burning of coal.

A PROPOSAL to build the world's biggest solar power station in the outback within three years has been backed by some of the nation's biggest polluters, including BHP Billiton, Rio Tinto and Woodside Petroleum.

The solar thermal plant would generate 250 megawatts of electricity at peak times, enough to power about 100,000 households, at a start-up cost of almost $1 billion.

BEIJING (Reuters) - Oil traders have long been accustomed to reading the tea leaves for clues to the true state of fuel consumption in China, but even the savviest analysts are being tested this year by a befuddling mix of signals.

An unexpected second month of weak crude oil imports reported on Monday gave fresh vigour to the bears, who read it as a signal that refiners had overestimated demand; bulls are still enraptured by surging diesel and gasoline imports, which they say may continue as industries resume operations after the Olympics.

(CNN) -- U.S. House Speaker Nancy Pelosi reversed her opposition to a vote on offshore drilling on "Larry King Live" on Monday night, saying she would consider a vote if it were part of a larger energy package.

In the middle of July I spent my own campaign money on a trip to the Arctic National Wildlife Refuge were I led a group of seven congressional candidates from around the country on a fact-finding mission to learn about energy independence. I spoke with energy experts, environmental experts, local community leaders and regular Alaskans about their thoughts on drilling for the 16 billion barrels of oil that are located in the coastal plain of ANWR.

I learned firsthand that it won't take 10 years for more domestic oil to reach American gas tanks. If we can get the federal government to remove the unnecessary and burdensome regulations that currently prohibit drilling in the coastal plain of the refuge, we can have more American oil flowing onto the market in five years.

John McCain is talking a lot about opening up new areas to offshore drilling, and now Barack Obama appears willing to consider the idea, too. A government report supposedly found that drilling won't lower gas prices, but I've also heard that the report was flawed. What's the deal with offshore drilling?

Among those in attendance will be honored guest speaker Senator Kay Bailey Hutchison, a proponent of industrial expansion, who will speak on the current energy crisis. "It’s important to the senator to increase U.S. domestic energy supplies," Matt Mackowiac, press secretary for Sen. Kay Bailey Hutchison, told The Port Arthur News.

(Bloomberg) -- Chevron Corp. said its Gorgon liquefied natural gas venture in Western Australia will bring forward plans to build a plant to supply fuel to the local market and help prevent energy shortages in the state.

Volkswagen Group of America Inc. is planning a coast-to-coast tour of its hydrogen fuel cell car, the HyMotion Tiguan.

Mapping a route from Portland, Maine, to Los Angeles, the Herndon-based car maker said the road show will wind through 31 cities to showcase a new environmentally friendly fuel that emits nothing more than water vapor.

Michael Klare: The conflict between Russia and Georgia is driven by a number of factors, including Russia's determination to retain a dominant role in what used to be the Soviet Union and Georgia's desire to regain control over two breakaway areas -- Abkhazia and South Ossetia -- that it believes are part of its sovereign territory. Personality also plays a role, with Georgian president Mikheil Saakashvili keen to demonstrate his mettle by regaining control over the two rebel areas and Russian leaders equally resolved to humiliate him.

But underlying all this is a larger, more significant contest: a geopolitical struggle between Russia and the West over the export of Caspian Sea oil and natural gas.

Georgia may have no natural resources to speak of, yet it has become a key player for Europe, due to 155 miles of pipeline that snake across its territory.

The Baku-Tbilisi-Ceyhan pipeline is the only practical route for carrying Caspian oil to Western markets that avoids Russia – a treasured asset for the a European Union trying to reduce energy dependence on Moscow.

We consistently hear from oil bulls that we've reached peak oil as production can no longer keep up with demand. We discussed the demand situation here, but what about the supply? Have we reached a point where we just don't have enough oil to supply demand? In the short term we're close, but in the long term, with prices at these levels, productive capacity will grow. There are many articles that discuss how supply and demand work, but here let's take a look at past data for the oil industry to see this in action.

The petrol plan, which still requires the green light from Parliament, includes a proposal that retailers must lock in their prices each day and inform the Australian Consumer and Competition Commission.

Fines would then apply if they increased or even lowered their petrol prices throughout the day.

The scheme's first petrol commissioner Pat Walker quit last month for family reasons and the federal Opposition is now warning the scheme is either "dead" or preparing to receive "last rites" in the Senate.

What is important about the plug-in hybrid is not the technology. It is the technology's demonstrated ability to build consensus among disparate interests whose constant warfare has paralyzed energy policy for decades.

Energy security is paramount; but what can New Zealand do to enhance this?

We can begin by adjusting our lives by walking and cycling more, using more fuel-efficient vehicles and using public transport, especially where it is electrically driven. In this context, the taking back of the railways, as a strategic asset, might well be a very wise decision.

Crude prices have backed off last month's run toward $150 a barrel. But they persist above $110 a barrel, a level that was hard to fathom even a year ago. The end of cheap oil heralds a potentially dramatic reshaping of the globalized trade flows that have emerged in the past two decades. Rising transport costs are suddenly a key factor in decisions about both where to place factories and how much inventory to stockpile.

For now, the trend seems to favor the United States. Swedish furniture maker Ikea opened a new plant in Virginia. Midwestern steelmakers are thriving. And consumer products giant Procter & Gamble is considering new distribution centers. All, some say, because the cost of moving things from far-away places is beginning to trump the savings involved in using far-away, low-wage workers.

"Globalization is reversible," says Jeff Rubin, an analyst at CIBC World Markets in Toronto.

PARIS (AFP) - Fighting in Georgia threatens a strategic energy hub, the IEA warned on Tuesday, shortly before Georgia said Russia had attacked a pipeline normally carrying up to a million barrels of oil a day westwards.

LONDON (Reuters) - BP has closed two oil and gas pipelines running from its Caspian Sea fields through Georgia but neither has been damaged by recent fighting in the country, a spokesman for the British oil major said on Tuesday.

(Bloomberg) -- Oil prices are falling because of an oversupply of crude, and OPEC may consider cutting production at its September meeting to achieve a supply-demand balance while maintaining sufficient excess capacity, Iran's OPEC governor said.

``I think the market is oversupplied, especially with the additional barrels of oil coming from spare capacity,'' Mohammad Ali Khatibi said in a phone interview from Tehran today. ``If producers prefer a balanced market, then the additional barrels should be removed, but if they decide there should be more stock build-up, then they will maintain production.''

(Bloomberg) -- The International Energy Agency, an adviser to 27 nations, raised its forecast for global oil demand next year and said it expects Chinese oil consumption to rise after the Olympic Games.

The IEA increased its forecast by 70,000 barrels to 87.8 million barrels a day, the Paris-based agency said today in its monthly report. Last week's pipeline explosion in Turkey may cut output from Azerbaijan by 30 percent this quarter and supplies are further threatened by military action in Georgia.

NEW YORK (Reuters) - A U.S. Coast Guard cutter will embark on an Arctic voyage this week to determine the extent of the continental shelf north of Alaska and map the ocean floor, data that could be used for oil and natural gas exploration.

U.S. and University of New Hampshire scientists on the Coast Guard Cutter Healy will leave Barrow, Alaska, on Thursday on a three-week journey. They will create a three-dimensional map of the Arctic Ocean floor in a relatively unexplored area known as the Chukchi borderland.

The end of cheap oil is happening now. The economy is already suffering for it, and unlike the Great Depression, recovery will not be a simple matter of putting people back to work. The Great Resource War is already underway, mainly in the Middle East, but also in smaller skirmishes scattered areas around the world, disguised to many as the Global War on Terror (or drugs as in the case of Colombia).

Depressing? Yes. Optimism? There is some room for it, but only if we recognize that the paradigm shift is already underway and that action to a more positive, minimalist lifestyle needs to start, before nature demands it of us in more dramatic fashion.

For decades, educators and employers have worried that too few Americans are preparing for careers in science. But there's evidence to support a new, broader concern in this election year: Ordinary Americans may not know enough about science to make informed decisions on key questions.

We need to get prepared for four degrees of global warming, Bob Watson told the Guardian last week. At first sight this looks like wise counsel from the climate science adviser to Defra. But the idea that we could adapt to a 4C rise is absurd and dangerous. Global warming on this scale would be a catastrophe that would mean, in the immortal words that Chief Seattle probably never spoke, "the end of living and the beginning of survival" for humankind. Or perhaps the beginning of our extinction.

A 140 km light rail network has been proposed as part of Qatar's bid to stage the 2016 Olympic Games. As well as serving all the proposed Olympic venues, the network would connect Doha International Airport with the port and hotel district. Work is expected to start on an initial phase of 85 route-km in 2009, with services anticipated to begin in 2015

I think they know something we don't, AND have the money to do something about it. I live near Denver, and the mass transit program (FasTracks) is in shambles due to cost overruns. No one knows what to do about it at this point.

They spent billions on I-25 while at the same time expanding light rail, a rather contradictory course of action. I think it is mainly oil that is contributing to these cost overruns. Sales taxes were raised with public support to build Fas Traks. Not sure the public would go for a further increase in sales taxes to pay for this.

Diverting money from road building/maintenance would be a great idea. But that would probably be unpopular as well. Despite the growing transit system, Denverites still love their cars.

I am a big fan of mass transit, including buses. We just had a family reunion in my little mountain town and my brother asked to borrow my car to drop off his daughter in Colorado Springs, 130 miles from where I live. I told him to suggest to her to take the bus which is way cheaper than making a round trip to the Springs. He will now barely talk to me. Anyway, she will be taking the bus unless my bro can convince my other brother to lend him his car.

Point of this little anecdote? All sorts of people talk the talk but when it comes to actually taking mass transit they default to the car every time.

That's true to an extent, even in the UK. But in any kind of optimisation process the key is that you want to go after the element which has the highest "cost of activity" times "frequency of activity". It matters much less whether people change their vacation plans, potentially involving huge mileage for maybe fifteen days, than if they change their daily commute, which is generally much shorter but happens close to 250 days a year.

On the anecdote front, I'm all for taking buses, but family will insist on holding get togethers at some point over holiday weekends which is precisely when most buses change to their "one or two in the entire day" schedule. So I end up either taking a taxi or grabbing a ride from someone. But I use public transport when I do have to commute.

Being pedantic, linear programming relies on the fact that there is always one global optimum that occurs at a corner of the constraint simplex; in some circumstances there can be equal global optima not at a corner. But that's a minor quibble.

I was more commenting on the irony that my family choose dates that makes getting to them by public transport difficult rather than easy. Commuting day in,day out without using a car is a bigger change than what happens four or five exceptional days a year.

Linear programming tells us that the "solution" is never a compromise, but always an extreme. Switching paradigms is jumping to new maximum/minimum.

Having used linear programming as a tool professionally, three comments:

The intersections of the constraint planes (thinking of the problem geometrically) are indeed compromises. At the optimal solution, many different constraints may bind.

For a planner, learning which constraints are binding at the optimal solution is at least as valuable as the optimal variable values themselves because they suggest options for doing better, and

The space of potential solutions in the real world is seldom convex. In the LP world, there is always a path from where you are to where you want to be such that you are better off at each step. In the real world, not always true.

Yup. Boring is, well, boring. Under the radar. Way under the radar, buried somewhere down in Earth's core.

It's not a dry quantitative thing. It's a weighted comparison. Think for example of all the expensive creepy gear some parents buy to track their kids, and all the expensive amber-alert signs along major highways all across the country - even though said gear and said signs deal with only the rarest of hazards. And yet those same parents think nothing of driving the kids across the state and back for no real reason at all. Surely, then, it should be no great surprise if one's family reacts: take the bus? you must be off your meds!

Not necessarily contradictory. A million people added to the Front Range area in the last 20 years, the next million forecast to happen in less than 15 years. Rail goes to only a limited number of places, largely runs along areas that are already developed and unlikely to see large scale re-development, so some expansion of the road system is necessary. I-25 is the only meaningful north-south highway, and will always get a lot of attention.

40% of the state highways' lane-miles are rated poor or worse for condition, much of that in the rural parts of the state where mass transit isn't an option. Unless you're willing to abandon the rural counties, where are the diversions going to come from?

I'm also a big fan of mass transit; but realistically, am a bigger fan of wind, cleaner coal, and cars with a 40-mile electric range.

unlikely to see large scale re-development, so some expansion of the road system is necessary

In the next twenty years, perhaps only a dozen years;

Only if zoning prevents redevelopment. Almost every US city (and certainly Denver) could and should have pockets of significantly higher density. High rises next to most stations with multi-story (tapering down to 2 & 3 story) multi-family housing for a quarter mile around each rail station would be the stereotype. Lots of street level retail in walkable neighborhoods around each station. Not much "Park & Ride" at most stations, the space is better used for homes & commercial.

Almost all of the "rural" development around Denver is just Exurban sprawl and should be (and likely will be) abandoned. Rural living with urban jobs.

Many rural roads could go to one lane maintained and a "pull over" lane when another rancher came in the other direction. Others back to gravel. Asphalt can be, and is, upgraded to fuel oil and even diesel. Too valuable to use much on rural farm roads.

Raise that number of "poor" from 40% to 95% while streetcars are brought back to every town of 25,000. Once rail is established, shut I-25 down to 4 lanes near Denver and 2 lanes further out.

Take two lane streets and convert one lane into a 2 way bike lane (spend some precious asphalt improving that side as part of the conversion) and make the other side one way street.

Draconian yes, but it is the best option we have at this late date.

Look at the implications of ELM and consider that the USA may get less than it's proportionate share of imported oil.

Best Hopes for not holding too tight for too long onto high energy sprawl development,

So in the interest of transitioning to public transit shift funding from roads to rail we cut back on road maintenance. What happens to these roads in the meantime, a transition which will take years? They become even more unsafe and raise the cost of personal transit through damaged vehicles. Many roads are presently in bad condition, so now were going to throw gasoline on the fire. Uh, remember what happened in Minneapolis last year? The public and political opponents of rail transit, seeing one more catastrophe like that one, will cry out for the heads of the politicians and advocates who pushed the policy of taking money away from maintenance. Maybe this are just acceptable collateral damage?

2) Raise taxes.

Raise taxes? Are you serious? Many states and municipalities are in a budget crisis now. Were also in a recession regardless of what economists and government officials state. Talk about political suicide.

3) Have the feds pay 90%, like they did to build the Interstate Highway system.

So where is this money going to come from? These are different times than the growing economy in the fifties and sixties that built the national highway system.

1) The roads will have to be triaged sooner or later. VMT is heading down and we need fewer lane-miles.

2) Taxes are NEVER politically popular, but they are raised when they need to be. I dislike general sales taxes to support transit, but that is the most common source. Property taxes and income taxes seem to be better sources with excise taxes (gasoline, liquor, tobacco) the best for new construction. Special sales taxes (restaurant meals, rental cars, tickets for shows & games) etc.

Somehow billions have been raised locally for new NFL, NBA, MBL & NHL stadiums, often replacing perfectly functional existing stadiums. If people want it, it can happen !

An example for Denver (hypothetical), a nickel/gallon gas tax and a 10% ticket tax (sports, movies, live entertainment) added to the existing sales tax should get things built ahead of schedule, not behind. Taxes expire once FasTrack is finished.

3) The feds can finance Urban Rail the same way they did the interstates. A nickel a gallon gas tax in 1955 (from memory), adjusted for inflation would be ..

We found the money for Iraq, I think that we can find it for an essential national security goal, Non-Oil Transportation.

With all due respect Alan, and I mean this sincerely as I greatly respect your engineering knowledge, I believe you are being very naïve and not being realistic about what is politically feasible. Everything you propose is based on a big IF and hopeful thinking. IF Americans can only think like the French. IF we throw off a policy of the military industrial complex and the drive toward empire. IF Americans suddenly and simultaneously accept light rail as THE solution and be willing to pay for it. IF states can forget their parochialism and work for the welfare of the country as a whole. IF the competition for funds between rural and urban could be overcome. I could go on, but there are a lot of ifs, and no guarantee they will reach the same conclusions as you, especially when power, influence, ideology, and money are involved. Moreover, your solutions as so urban centric that they have no hope of getting through Congress. No way Jose this will play in Montana. I hate to say this, but unless we get lucky enough to get a philosopher king, I don’t see any movement toward a viable solution until we hit bottom, and then it will be too late.

Every elected and unelected president presumes himself to be one. In fact, the US is very much like Plato's Republic, which was really an "enlightened" dictatorship.

However, if it can be shown how US/globalized corporations will benefit from building a rail-based transport net, then it has a good chance of becoming reality as sectional politicians will be bought. Remember the Corporate-Socialist US Empire exists to benefit corporations first and foremost, with people and the environment always last.

karlof-
Plato was a reactionary, and has been, along with Aristotle (the essence), wrong just about everything.
Plato and his "creation", Socrates, were members of Greeks "Reagan Revolution".
The last thing we need is "Philosopher Kings", the Straussian wet dream.
He hit his high point with the cave analogy.

I cannot go into details, but there is more support than you might think. Including specifically Montana (just got an eMail from the Gov. staff a few minutes ago).

Someone meeting with T Boone in a few days asked me for input (he has his own agenda, but will try and piggyback some of my ideas in as well).

Enough people are profoundly scared about this, that help is coming from unexpected places (a lobbyist for a military contractor is helping me greatly. I asked why, and he said it is not in the best interest of XYZ for the USA economy to crash).

I was tabulating the free help I have been given, and the "fair market value" to date is well over $1 million.

And that is the key point! All of Bruce from Chicago's points are valid but the status quo cannot persist. The pain is manifest regardless, but will it be pain towards a partial solution or pain and inaction leading to even greater pain.

"These are different times than the growing economy in the fifties and sixties that built the national highway system."

Sure the economic conditions are different, no doubt far worse. Hence this site and this conversation. The ounces of prevention are gone, we missed them.. it'll be pounds of prevention today, which WILL hurt, or a severe pounding further down the (heavily degraded, either way) road. Got something better? Please do say what else you think is a reasonable course to take.

Actually, I would put my money, actually a choice of some nice organic crops grown by myself, such as asparagus (I‘ll even put heavy straw over them to give you some white ones), where my mouth is, that a dramatic shift in national federal policy shifting highway funding to rail doesn’t occur within three years. No wiggle room with little meaningless bills that pronounce policy such as “no child left behind” with goals that are illusory, no baby steps that are passed off as King Kong’s footprints, but actual big time national projects being paid by money that was instead earmarked for highways. Actually I hope I'm wrong.

Yup, having been a political junkie since I can remember (I was the weird kid who watched the Nixon Kennedy debate with pleasure) from an old Irish political family from Chicago I've sure seen enough political posturing in my day. Everyone shakes hands, signs the bill, poses for the camera, and then nothing gets done. Jaded? You betcha.

This is the scenario BNSF Railway is investigating. The railroad already leases its transcontinental rights-of-way to fiberoptic companies in exchange for some capacity for its own communications and data transmission needs. It stands to reason that, in exchange for access to discounted electric traction power for trains, BNSF could lease right-of-way space to an electric utility on, for example, the Transcon, tapping into the high-tension lines for 25kV or 50kV catenary to power electric or perhaps even dual-power locomotives.

U.S. and other national ethanol quotas are scheduled to increase as they are phased in. Ethanol contained about 2/3 of the BTU's per gallon as gasoline. Ethanol has been blamed for premature engine failure in boat and other small combustion engines.

An article about a world record setting Iowa corn and soybean farmer indicated increased yields were possible with increased seeding per acre, organic fertilizer application (chicken manure), daily watering, and the use of pesticides and fungicides. Increased crop yields per acre were accomplished only through increased investment of resources.

Of course they're "relevant". They're just not more relevant than SA or OPEC's president.

Iran doesn't have excess capacity at this point. You need to read all of their statements through that lense. Classic cartel dynamics.

As oil prices fall, Iran tries to hold them up. This can be by trying to raise geopolitical tensions ("we could close the straigts tomorrow!" or "we've got a cool new missile that could hit Israel") or by trying to "speak for OPEC" in ways that imply a restricting supply.

Not that I'm surprised... heaven forbid that anyone tell a peak oil proponent that production could ever be restrained by choice (political/economic/whatever). Let's just pretend that oil supply doesn't grow simply because it can't.

heaven forbid that anyone tell a peak oil proponent that production could ever be restrained by choice

Peak oil proponents do understand that production IS constrained by choice - you clearly don't understand what peak oil is about - the choice is to make a profit out of a geologically difficult/risky situation!

Oil supply doesn't grow because it can't and still maximise/make profits. Supply has nothing to do with price per se, it has to do with making a profit on the marginal barrels ... price > costs.

If you don't believe countries oil production peaks - for whatever reason - take a look at this:

That could be true... since they keep changing their minds what it's "all about".

What you here propose as what they "understand" sounds an awful lot like what non peak oil economists have been saying for years. If the price of oil rises high enough, there's all the supply you could want.

As for the last... I never said that production never peaks in some nation. It's that "for whatever reason" that turns around and bites you.

Whoa!!! That's a howler!! Let's see, how many times have I said that oil producers will opt to cutback production? At least two-dozen times at a minimum. Even the denigrated Joe-Sixpack knows that oil supply fluctuates. And I thought john15 had problems.

Whoa!!! That's a howler!! Let's see, how many times have I said that oil producers will opt to cutback production?

You can say it again if you like... it still won't be responsive.

If you've watched OPEC argue internally about (for instance) whether new quotas should be based on percentage of prior quotas or an absolute decline, you would see that Iran isn't looking to "cut production"... they want others to cut production so that they can still pump every quart they can at the highest possible price.

This isn't anything new. The difference this time around is that overall world supply has been so tight that, until fairly recently, OPEC didn't have to act in concert. They could pump all they wanted and still watch oil prices rise. Now (actually starting a few months back), the internal struggle within OPEC is starting to resurface.

The danger (just like the early 80s) was that when they let the price rise too far, non-OPEC production climbed rapidly while demand fell off. Prices collapsed AND their market share declined.

The first 18 mins was enough for me! Impressive presentation, lots of nice graphs, good speaker... "Proven reserves; oil 41 years, gas 67 years, coal 164 years ('perhaps up to 1000 years, when we start really looking for it'). Plus yet-to-find and unconventional. Oil; another 4.5 trillion barrels all up... Not running out anytime soon". And so on.

If the presenter's "facts" carry any weight at all, no wonder MS media has no interest in Peak Oil discussions!

I wouldn't worry about it-focus on what is known (but not stated) by everyone-the supply of cheap oil has peaked and is in decline. A lot of these energy reserves will never be used because it won't be worth the expense-1000 years? You could say a million years.

All the good intentions in the world could not have prevented the United States from a 37 year decline in oil production after it peaked about 1971.

For years people said there was no real estate bubble. It was only dogma. Now the bubble has burst. Banks are in trouble for having lent to people who did not believe there was a bubble. Real estate investors are in trouble for not believing the bubble existed. Bankruptcies, divorces over money problems, distress, and many days latter, no one can say there was no real estate bubble.

Surely the downside of peak oil is coming. When your new oil frontiers were 20,000-30,0000 feet below sea level, there is not much deeper you can go in your quest for oil. Every increase in oil consumption brings an accelerated depletion of oil fields. Currently the world may be using between 30-32 billion barrels of petroleum liquids per year. People in the industry have seen production costs rising. There have been numerous delays, such as at Thunderhorse in the GOM. One of Canada's largest tar sand oil producers, Canadian Natural Resources, posted a major loss this past quarter with record high oil prices. There was no shortage of mismanagement. With companies rushing toward areas north of the Arctic circle in hopes of finding oil or natural gas there is not much more north to go, or is there? Speculation about huge reserves of shale gas may consider that the cost per well rises as people drilled into poorer and poorer rock units and the quantity of gas returned per well lessened. An oil company manager wrote an email to me that wells in the area of the Horn River Basin may cost close to 10 million dollars a piece. The first year production decline rates from North American gas wells has been steadily increasing. There were yet many stranded gas deposits far from pipelines, yet the demand for liquid natural gas has outstripped supply. Natural gas is a popular substitute for gasoline in autos as it is much cheaper than gasoline.

Saudi Arabia publihsed that they will reach peak oil capacity in 2009. Forecasts as to how much they will pump are speculative. It is not certain whether or not Russia can increase production after 2010.

Tanaka: We have noticed that production volume is declining sharply. According to our projections, the volume in existing oilfields worldwide decreases by an average of 5 percent a year. This means that each year we need an additional 3.5 billion barrels of oil a day just to offset these losses. At the same time, however, demand is growing by about a million barrels a day. This imbalance makes it clear how incredibly tight the market is. A gap is developing here.

Having watched the whole presentation, I think you did yourself a disservice by not watching the rest. He did considerably better for the remainder of the presentation, stating many things that, I'm sure most TOD'ers would agree with. He did a much better job than TOD member "x" has ever done in explaining why corn ethanol makes sense for the US (see http://www.theoildrum.com/node/4377#comment-389789 ).

At 1 hr. 18 min. 35 sec., in response to a question on EROEI, he showed a slide with the energy inputs into 1MJ of ethanol, dividing them into coal, NG, nuclear/hydro and transportation fuels. He pointed out that only 0.05MJ of transportation fuel was used. For me, the revelation is that ethanol production largely uses energy that, is not well suited for use as transportation fuel or in the case of NG, not currently used. When your available energy resources are not transportation fuels but, what you desperately want is transportation fuel, I guess you would be willing to trade your energy resources for transportation fuel at a loss.

I responded to the above referenced post by "x" with the argument, "Suppose we were to dispense with fiat currencies and start trading on the basis of BTU equivalent notes instead of FRNs. Who do you think is going to offer you 10,000,0000 BTU equivalent notes for 9,000,000 BTU equivalent of corn?". I now see that the answer is, somebody with an abundance of coal and a desperate need for liquid transportation fuels.

That does not take away from my argument that in the case of countries with little or no FF energy resources, EROEI is extremely important.

Note that the comments are presently disabled for the Saudi post. Also, there are some mistakes. The most recent Saudi peak was 2005, not 2006, and both 2006 and 2007 were down relative to 2005 (the graph shows one annual decline). Also, 2008 is almost certainly going to be below 2005 on an annual basis, so we will probably have to wait until 2009 to see if the 2005 annual rate is the final peak.

Most people just don't grasp the vast volume of oil that Saudi Arabia is currently producing. As you know, the East Texas Field is the largest oil field in Texas and the overall Lower 48. It was so prolific that it drove the price of oil briefly down to 10¢ per barrel in the Thirties, and it was a primary source of oil for the Allies in the Second World War. It took us decades to fully deplete the field. In the three full years since 2005, Saudi Arabia's cumulative production will be close to two East Texas Fields, on the order of 10 Gb of crude oil--or close to one Prudhoe Bay.

West, you are right on the money, and it is especially important to remember that this production from only a handful of fields with an average life of 50 years!, from some reason a lot of people assume that Saudi Arabia is immune from depletion, the day Saudi Arabia is forced to show lower production (as Russia did for 2008), I believe oil prices will skyrocket, and this day is coming ever closer.

I will just say that 2.2% annual decline over the next 7 years on the existing stuff..... I just can't see it.

I can't either. But the point of the post is that there is nothing in the data itself which suggests otherwise. We have to rely on additional information in determining the likelihood for them maintaining current trends.

Just a note to let readers know that the numbers issue was addressed earlier today, and handled by correspondence with Westexas. The numbers in the post should be correct.

With respect to not having comments enabled, I posted the story this morning, since Nate and Kyle were not available. I am new at posting stories, and didn't realize that if the story was written more than a week ago, the person putting the post up has to manually adjust the settings to enable comments. Now that I know that this can be a problem, l will check for this in the future.

I'm sure that those who bought in to the NASDAQ after the first 10% decline thought it was a minor correction and a good buying opportunity too. No doubt they would have assumed that since they had already ignored arguments that tech stocks were a speculative bubble... there was no point in bringing it up again. "Already dealt with that".

But it didn't impact reality... now did it? :-)

You're asking me to prove the lack of something (fundamentals)... when you should be wondering what those magical fundamentals were that doubled the price of a commodity in one year in the first place.

when you should be wondering what those magical fundamentals were that doubled the price of a commodity in one year in the first place.

Millions of words over the course of several years have been devoted to exactly those fundamentals. Using those fundamentals, people on this site (and elsewhere) predicted the rise in oil this year. It is only analysts who are clueless about commodity fundamentals that were surprised by the rise. Being clueless, they ascribe the rise to anything but fundamentals, and being still clueless, they ascribe the current decline to anything but fundamentals.

There's nothing magic about it. It is there for anyone with eyes to see.

Millions of words over the course of several years have been devoted to exactly those fundamentals.

Yep... millions of words that added up to the same cry of the tech investor... "this time it's different".

The supposed "fundamentals" were things like "oil is a finite resource". That's not a fundamental, that's a mantra. It's just as true at $20/bbl as it is at $2000.

Using those fundamentals, people on this site (and elsewhere) predicted the rise in oil this year.

Big deal. The tech investors predicted the increase in that sector too... right in the face of those pointing out that it was unsustainable.

They were "right" right up until the point they looked foolish, and you've confused coincidence with causation.

There's nothing magic about it. It is there for anyone with eyes to see.

Commodities are more prone to bubbles than any other asset class. It's stunning how some gold bugs (or "oil bugs" etc) see bubbles everywhere except where they are most likely to occur. What's "there for anyone with eyes to see" is that the runnup in commodity prices looks exactly like an inflating bubble. That doesn't mean that it HAS to be one... but it's pretty darn likely.

To the content: what has already been pointed out is that fundamentals have led to the rise from $24 in 2003 to $147 in 2008. However, nobody has claimed that the entirety of the price rise was due to fundamentals. However, anyone looking at oil production - crude - over the same time matched against the price rise and coming to the conclusion fundamentals were not the primary cause has virtually no leg to stand on. That seems to be your position.

You ignore something else: virtually everybody who posts here sees volatility as a hallmark of the no-cheap-oil era. Why do you not mention this? Are you a liar? Creating a false impression is lying. (Ah, how I wish for a legal and moral code of true simplicity!)

For my part, and I am but a guy using the info gleaned here and elsewhere, I felt oil prices were pretty defensible at around $120 and was surprised by the rise to $140. That was politics, dawning awareness of the true situation, etc. The drop now is an over-correction coupled with seasonal trends, the drop in China due to the Olympics, said volatility and a settling down of the slight panic that came with the sudden media attention to Peak Oil.

Added to all this is the acknowledged last hurrah of rising production possible 2008 - 2010. Should it fully materialize Russia's decline puts that into doubt. Prior to that I (and most?) was expecting new records in production during this period. Would that not mitigate prices?

So, you've offered nothing not already discussed. In fact, have offered nothing but sarcasm. (Though I do get a kick out of the irony of the surety of your comments that oil prices are nothing but a speculative bubble.) I invite you to stop posting until you can do better.

Utter nonsense. There has probably never been a bubble in a base commodity (oil, coal, copper, iron). Gold is different, because it has a subjective value. But the value of oil (and other base commodities) is entirely objective. It's value derives from what we use it for. If there is an abundance, the price goes down. If there is a shortage, the price goes up. Period.

We've been over this ad nauseum here, so I'm not going to go into this in detail again; however, there is ZERO evidence of a bubble beyond a price rise, and ABUNDANT evidence that fundamentals are driving up price.

Big deal. The tech investors predicted the increase in that sector too

The people who predicted the current oil situation predicted the fundamentals. They derived the projected price increase from the change in fundamentals. When the fundamentals turn out as predicted, and the price changes as predicted, it is pretty much confirmation that the hypothesis is correct. Your analogy with tech investors is specious.

The reason commodities are more subject to bubbles than other asset classes is because their inherent value is unchanging. Put more simply, it's because they're so fungible. Their pricing is limited to supply/demand (or "perceived" anyway), currency fluctuations, and speculation/emotion.

At least a tech stock or a home could actually be inherently more/less valuable than the day before.

I'm not going to go into this in detail again

I don't blame you. I wouldn't want to be stuck selling that line over an over either.

there is ZERO evidence of a bubble beyond a price rise

Got it... apart from the single greatest measure of a bubble... there's no evidence of a bubble. I suppose you believe that oil is fundamentaly 20-25% less valuable than it was a month ago?

Your analogy with tech investors is specious.

Nope... they predicted what they thought were "fundamentals" too. And once again, you've confused coincidence (and manufactured coincidence at that) with causation. There have been lots of predictions of so-called "fundamentals". Hindsight is 20/20.

If you do a bit more reading here as you claim to have done, you'll find out that ALL of the major speculation/manipulation arguments have been analyzed and found to be wanting. By multiple people. Through multiple studies. From multiple entities. Please go back an re-read them until you understand them.

It's not that speculation/manipulation could not have some effect as futures prices may affect spot prices on physically squeezed markets somewhat.

Read that again: already physically squuezed markets. As in shortages. Very tight margins, almost nil spare capacity and bad supply-demand situation. All of this was proven. All the data points are available as historical records here on TOD. They've been debated to near death.

However, to assume that the price doubling from fall 2007 was all or in majority due to speculation/manipulation requires proof.

You have given absolutely no proof. None.

Now, this doesn't mean you could not theoretically be righ, but it is impossible to assess that, because you offer no proof.

It is impossible to believe you, if you give no proof or a model of how futures market speculation dictates the majority of the price moves on the spot market. There's plenty of proof for tight markets from all the major players (IEA, EIA, World Bank, Bank of England, etc).

What makes you so special that you can discard all of their data and analysis, and draw your own conclusions without giving a single shed of proof?

And before you answer, do remember that correlation is not causation.

Either you present a model of causation and actual real world data about this model working - or your argument is worth zero. It remains what it always was: a mere opinion, without any data to back it up.

I'm done arguing with people like you, unless you provide PROOF. Do you have ANY?

I think there is an element of speculation in the oil markets. Hence the massive volatility. The swings are due to rapid changes in sentiment in an environment where small pieces of information have great power to move prices (e.g, a supply constrained environment).

I personally regarded the run from $100 to $140 as overdone, was not at all suprised to see a correction, and would not be suprised to see oil continue down to $100 before resuming an upward trend.

A "bubble" implies speculators. What attracts speculators? A good story. In other words, a good environment for speculation is create by FUNDEMENTALS.

So I think you have a layer of speculation - swings to the upside and downside as major players alternate between long and short positions - over the top of the longer term trend.

My gut feel is that the trend line puts us at about $110 at present, with swings of around $30 occuring to either side of this trendline (30% above and below).

I'm not particularly interested in arguing a position as I think the whole situation is too uncertain for anyone to actually be "right". We're all in the dark really.

I'm beginning to think people have the dollar-oil relationship backwards. Conventional wisdom is that a weaker dollar will drive up oil and vice versa. I'm not sure the relationship isn't the other direction -- weaker oil pushing up the dollar (or at least that relationship can run in both directions).

If that's true, I would expect the dollar to weaken once China starts buying oil again.

I'd also note that trying to value a fiat currency in terms of other fiat currencies is a fool's game. The Yen carry trade distorts most of the world's currencies. Even though it is much weaker than it was last year, there are signs it has picked up again recently. When it is active, it strengthens the currencies it is targeted at and weakens most others, but especially the Yen.

No, I don't think so - actually, the strengthening of the dollar is a double-edged sword, since so much of what has been keeping us afloat was the improvement of our trade deficit. And I'm not sure admitting that large chunks of the rest of the world are seriously screwed amounts to actually improving the situation in the US. No, I think the markets simply are insane - I don't mean that as a derogation, but a diagnosis - that is, markets have increasingly little to do with the realities of the economy as a whole.

Although in some respects it simply echos other posts found on this site, a Mr Peter Baker has an interesting piece on BBC, "Feeling the heat of food security:"

I had originally planned to call this article Supermarkets, Smallholders and the Second Law of Thermodynamics.

[...]

For example, a recent study looking at Nicaraguan coffee production and processing showed that the total energy embodied in coffee exported to several countries - though not all - was not compensated by the dollar price paid for that energy.

Essentially, the conclusion was that the country is exporting subsidised energy.

This is a post I made at peakoil.com regarding using Text-To-Speech software for making MP3 files to listen on headphones/iPod/car stereo, which was greeted with sheer indifference, but perhaps it will be of interest to some here. Might have been a hit with the lurkers...beats the hell out of talk radio. Can't stare at a monitor all day. Mostly I use it to "listen" to Drumbeat, too.

Given the nested nature of comments on TOD, I am not sure how well this would work in the "flow" of thought on comments. It is difficult enough when reading them. It might come in handy on other sites. I think that some sort of auto-harvester that would automatically grab the contents of an RSS feed, convert it to a screen-read mp3 file, then is automatically added to your "podcast" subscription and as a result auto-synched to your iPod or mp3 player would be pretty dandy, but anything that requires much manual intervention isn't likely going to get much of anywhere.

Even cooler would have that feature be part of the serving website, so they can have automatically created podcasts of yesterday's articles, comments, or headlines..

As a general comment, I tried doing that two years ago with some book texts from Project Gutenberg to listen to as I walked to/from work. It might partly have been because my mind was already involved in work stuff and so tending to revert to thinking about that, but I found that text-to-speech lacked the intonation for meaning and emphasis that meant that, unless I really concentrated on listening, I ended up tuning things out as some thought occurred to me. When I finally realised I then had to refind the last place I remembered and restart, so I gave up on the process. I find professionally read audio books much easier (even when walking, etc) to follow because of the intonation, even when moving around. However the text-to-speech program wasn't anything like cutting edge and maybe rhythm and emphasis detection has improved since then.

I'm fine with the Microsoft Voices, AT&T Natural Voices are marginally less mechanical. But then I'm an aficionado of things like noisy rock bands, dissonant avant garde, bagpipe music...have a higher tolerance than most I'd guess. People I've subjected the high speed TTS
to leave the room tout suite!

Some of the pronunciations are amusing, too - Walmart comes out as "Whale Mart."

My process for making the MP3s is pretty streamlined - only takes maybe 3 minutes start to finish. Generally process about 5 days of Drumbeats in a batch, then put 'em on the iPod. Using OpenOffice macros to remove all the "Permalink" etc. clutter is the crucial part. Being both a productivity and news junky, I'm very happy with the results. Now, if I could just become addicted to actual work...

All the details for the setup are covered in the post from peakoil.com I linked to in the OP. As I state right off the bat it's oriented for XP but Macs have TTS software built in and the approach to editing out all the chaff should be much the same.

Sadly, I was and still am unable to get the supplied link (http://www.peakoil.com/fortopic43279.html) to work. After many machinations, including registering as a user, I finally received a message to the effect of, "The topic or post you requested does not exist"

Google turns up a single page at that site, http://www.peakoil.com/post613640.html, relating to text-to-speech and it does not appear to mention anything about how one goes about obtaining the programs and or scripts.

If you slow the rate of export, you extend the timeline for exporting, or you increase the amount and time for domestic use, which I believe is a very good possibility. I fully expect Russia to husband its hydrocarbons for its fundamental domestic use in a manner quite different from the capitalist West's develop it and sell it as fast as you can mode.

I found that in July 08 Azerbaijan exported 25 million barrels through Georgia, or just over 800,000 b/day.

1) How long till local storage tanks are full and production has to be cut back ? This production cannot be "made up later". The smaller pipeline to the Black Sea was open when the Russians attacked, but the larger one to Turkey had been blown up days earlier.

2) What is the capacity of the oil pipeline through Russia ? How much oil was exported that way in recent months ?

Oil can be exported by rail as well (China imports oil from Russia by rail). Azerbaijan has a closed rail link to Iran, that goes through Armenia. A direct Azeri-Iranian line is in advanced planning. Another closed line to Turkey through Armenia and an Azeri-Georgian-Turkey line is under construction.

The example of Kirkway Estates illustrates the fragility of the American new construction housing market for both new home buyers and their builders. Americans like buying new construction — it accounted for 23 percent of all homes purchased last year, according to The 2007 National Association of Realtors Profile of Home Buyers and Sellers.

But given that a growing list of builders have seen construction loans called by banks or fail to sell newly built homes fast enough to keep up with construction loan payments, it’s no wonder new construction “half-towns” are popping up along the landscape. The scenario is playing out all over the United States, and is the topic of blogs such as The Home Builder Implode-O-Meter.

I've seen the "ghost town" thing happen numerous times here in Texas. What usually happens is a period (perhaps years) where the other lots stay empty, then ownership of that land passes to someone else and they start building - but lots of times it will be an entirely different type of home.

So the lawyer (in the linked story) and his $500,000 home may be surrounded by homes that sell for a fraction of the cost. And best wishes when he wants to sell ten years from now...

They are sweating because only 97.56% of loans are being paid on time???? That is more than 39 out of every 40 mortgages is on time. Does this mean that when only 95% are on time we'll have an epidemic of CEOs jumping out the windows of their luxury penthouse offices?

Consider the concept of fractional banking. This is a very brief and not entirely precise description, but you can always search around here for the links to the videos on "money as debt".

Banks lend out many more times "money" than they have as deposits/assets. Recently I've seen numbers north of 50 to 1.

If a mortgage goes bad, the money that disappears comes out of the bank's assets. Poof. At (hand-waving number for sake of argument) 20 to 1, you only need 5% of mortgages to go bad before the bank's assets disappear completely. (And recall, the number in the original comments is the bank's *best* borrowers.)

Of course, this is mitigated perhaps by the fact that the bank gets the house when the mortgage defaults. But the housing market is in a tailspin through much of the world. So the bank will only get a fraction of the amount lent in the mortgage back by selling the repossessed property. If (again for sake of argument) the bank gets half the mortgage amount, then it takes 10% failed mortgages to drain the assets of the bank.

However, long before that 10% happens, the bank will lose the confidence of its depositors/investors, who will pull their money out of the bank, causing the ratio to skyrocket. This makes future lending much less likely and brings us back to a lower required percentage of bad mortgages to crash the bank.

I'm not a financial expert, but this is a high-level view of why the banks are sweating. Though at this point, I think it's a bit more than just sweating.

Heh, that CNN article has a link to a piece of theirs on buying foreclosed houses; mention is made of an outfit in Dade Co. FL with an apropos name: "Cacophony Group Real Estate Services." "Looking for peace of mind? Come to Cacophony!"

They are sweating because only 97.56% of loans are being paid on time????

Its less than that about 4% of prime loans are behind payments and the number of homeowners falling behind is growing fast. If the trend continues more than 8% will be deliquent by January.

Banks also can't sell REOs. Homes that go into foreclosure they are holding on to. In the meantime, they have to pay for maintaince and taxes on all these properties they are holding onto. The banks worry that if the dump them at auctions, it will depress prices further, causing more on-time paying homeowners to have negative equity. Once homes are upside down (loan exceeds property value), homeowners are more likely to stop paying and let the bank take it rather than pour money down the drain.

Well these banks should work with the home owners and take whatever payment they can get. At least that way they would get something, the way they are doing things now kicking out 100's of thousands of people out of their homes and then the houses sit empty and they dont get a thing.

As gas prices soften, consideration of SUVs increases
Maybe it's just nostalgia for the good ol' days of the early 2000s, but the recent drop in pump prices is already drawing consumers' attention away from their "single-minded focus" on smaller, fuel-efficient vehicles, auto data tracker Edmunds.com reports.
"Consideration data," which track interest in various vehicle segments by visitors to Edmunds' website, indicate that the trend toward smaller vehicles is leveling off while interest in segments that had been declining — such as compact crossover SUVs — is rising. What's more, interest in gas-electric hybrids is down 34% since June.

Just another example of the saying "never underestimate the intelligence of the American Public". This comment from the article:

Through July, sales of small cars were up almost 11% this year in the U.S. while sales of SUVs were down 16% and pickups were off 23% from a year earlier.

Another way of looking at these statistics is that July sales compared with last year shows that SUV's were at 84% and PU's were at 77%. There's no statement about the split in the SUV category between large ones and smaller, so-called "crossover" SUV's.

Now, what does this say about the price elasticity of oil? There's no statement about the split in the SUV category between large ones and smaller, so-called "crossover" SUV's. These sales were for vehicles which likely reduce the fleet MPG average, thus this data represents a potential INCREASE in demand. And, the auto companies are dumping the big guzzlers, such as the local FORD dealer that advertises an F-150 for about $12,000, after incentives and rebates. How many people remember the old days when PU's were less expensive than cars?

What's really scary is this comment:

"With the initial shock of high gas prices fading, consumers are returning to rationality and again viewing gas consumption as just one of many factors when considering their next vehicle," said Edmunds.com Chief Executive Jeremy Anwyl. "And as gas prices actually decline, this trend could accelerate."

This guy apparently thinks it's irrational to conserve oil. When these people finally understand that Peak Oil is a fact, not a "theory", they are going to be in for a very big shock.

The Edmunds.com CEO was talking about it purely as a financial decision. If you look at the big discounts and rebates on trucks and look at the price premiums and waiting lists for hybrids and compact cars, it'll take a long time for the gas savings to pay off the purchase price, even at $4.60 for regular unleaded. There's just as much emotion as there is financial calculation that goes into the car buying decision, and there was probably some overshoot in hybrid and compact car demand and the same for trucks. That said, just because truck sales bounced off rock bottom doesn't mean Happy Days Are Here Again.
The flaw in that analysis is really the projection of future fuel prices. You'll be keeping a new car or truck for at least five years. Gas may have dropped to $4.10 from the peak of $4.60 a month ago, but it's safe to say we'll be paying more than $4.60 in the next few years.

That should warm the hearts of those who think using the SPR to lower gas prices is a good idea. They don't seem to recognize that price and demand are related, and price is the most direct method of getting people to modify their behaviors.

Thats why I'm worried that this price slump in crude just might make my bosses think that maybe they jumped the gun on pulling their investment on trucks and SUV's.
If you are working for a domestic auto producer today you are experiencing the panic, confusion and denial that accompanies a major paradigm shift, having gas prices retreat significantly will only make the voice of denial stronger.
Still numbers don't lie, (mostly :)), and we'd need to see a few quarters of increased sales of those vehicles to cause a return to BAU.

This week CNN is running a bunch of stories about alternate energy and such. One of them is about jatropha. You only get about two gallons of fuel per tree per year, so you'll need more than a couple. :)

He's just trying to grow enough to fuel his tractor, though, which I suspect will be the way such biofuels are used in the post-carbon age.

Around here car batteries are sealed and sent back to the factory for recycling, but in poor countries there are whole cottage industries of battery rebuilders. It's just lead plates and hydrochloric acid. Nasty stuff, but doesn't need a high tech infrastructure.

ONLY, ONLY, ONLY...........and where will the lead plates, surrounded by a sealed plastic and hydrochloric acid come from, where does the plastic container come from. and how will it all be transported.

Hydrochloric acid was discovered in 800AD, and lead casting goes even farther back. You cut open the old battery and carefully glue it back together when you're done. Sure, it's not as safe as a factory sealed battery, but people around the world do it all the time.

Of course, there will be other spare parts like high-pressure fuel injectors that are irreplaceable without a high-tech infrastructure. In that case farmers would rebuild tractors with 1930's engine tech as long as you could supply it with biofuel with less land than a horse or ox team.

CJ;
Ben Franklin was playing with batteries ('leyden jars')in 1750.. the insulating containment was glass.

With all due respect, Cliff, you seem to view the mechanical world as if it will just evaporate along with oil. We have dredged up just ungodly amounts of useful metals and minerals, which to a great degree have been (to borrow from Charlie's Angels) assigned very tedious duties. Chemistry will not be gone, neither will electricity or the metals required to transmit and work with it.. while those systems may not continue to look like today's grid, - that isn't a requirement for its use, either. A young man in Africa turned a discarded bike and some wood and wire into a wind turbine for his family.. people are cooking meals with Cardboard and spare Aluminum foil, which was originally going to be used just once. There are starches, proteins & sugars in Milk, Potatoes and Corn, to name a few.. that can be turned into useful plastic polymers. ( Green Plastics, by ES Stevens )

And we have, most importantly, printed and reprinted the information about materials, processes, scientific findings and experiences and inventions from all over the globe, and spread them out, all over the globe, so that there are fairly good odds that our knowledge has itself propagated into a number of safer nooks and crannies out there where it can survive and regrow without having to start the whole thing back at Olduvai again. If we do have a serious collapse, many places would fall that far, but many others should not have to.. where regrowth can begin again.

Tractors may not be around forever, but I suspect they will be around long enough that you and I won't see the last of them.

As the price of fuel and parts increases, and the number of tractors decreases, there will be incentive to switch to other methods. This is one area where I expect the transition could be pretty smooth. Tractors won't disappear overnight.

Just three weeks ago, the Russian-Georgian conflict would have been the kind of news that woul have sent oil prices shooting up to $170 or $190 per barrel. This week it's met with a yarn, and price drops.

Have things really changed that much in three weeks?

Even more astounding is the price drop in natral gas now at $8.27.

The weather has been reasonably mild in most places though and the recession must have cut into industrial demand for nat gas, but still...

If I had been forced to bet money, I would have bet crude oil to hold at least $120 and and nat gas $10.00 per mm/btu at least to the end of the year, and I was the one warning of possibl fast declines!

The outstanding question is, did all the hedgies get out in time? Someone was buying at 140,130,120...and at $14 per on nat gas?

The EIA just reported today that OCED oil inventories are 30 million barrels under the 5 year average, thus we are entering the winter with very low inventories, combine this with the shut down of at least half the Azri production since last week, which is basically offsetting the Saudi increase and you have a situation where OCED inventories will probably not be replenished anytime soon.

I believe in the next couple of weeks, we will have a new oil uptrend in motion, this uptrend should reach its climax in November just when the IEA releases its long awaited repor about the state of the world largest oil fields.

The MSM is giving credit to the drop in oil price to this line in the EIA report

Consumption. Preliminary data indicates that global consumption rose by roughly 500,000 barrels per day (bbl/d) during the first half of 2008 compared with year-earlier levels, as a 1.3-million bbl/d rise in consumption outside of the Organization for Economic Cooperation and Development (OECD) was partially countered by an 800,000 bbl/d drop in U.S. consumption compared with year-earlier levels.

If the total global consumption rose in spite of a big drop in the US how is that not perceived as bullish????

I understand that sentiment can be a big driver of the markets but sheesh!

These numbers also make me eat crow in my insistance that lowering US demand has not been perceptible (at least by me) as anecdotally many TODers have posted to the contrary but I've also received refutation from an expert, unassailable source, the local Costco gas station attendant.
Tonight he told me that traffic through his station is way down over earlier this year.
I mounted a weak defense saying that while Costco gas is usually cheaper than most retail stores by a few pennies, I was seeing the reverse, competitors lower than Costco so maybe they were getting the business instead.
I conceded when he said that he'd been working there since it opened, 10yrs or so, and he never saw such a drop off.
He's even had time to paint the place.

Today a current affairs program of the Finnish Broadcasting Corporation YLE claimed to have found serious flaws in its construction. Reactor structures have been welded without proper documentation (welding plans) for over a year. Eventually when an outside welding supervisor was hired and begun to produce the documentation, he was frustrated and resigned for 'ethical reasons'. The subcontractor responsible for the welding work then tried to pass some of its welders as these supervisors but this was revealed when authorities visited the site and the welders in question protested that they were not qualified for the job. Now the subcontractor has named a new supervisor, with a french name whom nobody who works at the site recognizes. Much of the welding for the foundation of the reactor has already been cast under tons of concrete and no documentation of its quality is available.

More soon, when the Finnish Broadcasting Company bothers to put up anything in English...

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The project has been marred by difficulty from the beginning as Areva has shuffled around numerous subcontractors with dubious quality credentials. Employees at the site have been threated with legal consequences if they talk about what is going on to the authorities. The mood at the site is: "shut up and do the work as quickly and cheaply as possible".

The original commissioning date of the third reactor was set to 2009, but later the commissioning deadline was moved to summer 2011. The plant is operated by Teollisuuden Voima, a subsidiary of Pohjolan Voima.

The Olkiluoto-3 reactor is at least 24 months behind schedule after 28 months’ construction, and some 50% over budget. The nuclear industry has shifted from presenting the plant as a flagship new-build project to saying this is a normal case of the unique challenges of building first-of-a-kind plants.

This new Finnish nuclear plant, the world's largest, was supposed to spearhead the new rise of modern, safe and clean nuclear power around the world, that will save up from GW and PO...

There is absolute safety and perceived safety. I think the main consequence of these incidents to do with building Olkiluoto-3 will be yet more bad reputation for the nuclear industry in general, globally - and hence the option of alleviating the coming peak energy with fission energy will not be available to us. Politicians are less likely to invest their careers in promoting such projects - and perhaps more importantly some of the investors who fund these plants might be scared away by the potential budget overflows due to delays, extra safety and quality measures.

Those people who speak of 'safety of the technology' are usually taking a simplified point of view to nuclear power. Nuclear power isn't just some theoretical reactor concept - this is a real power plant with pipes, pumps, valves, wires etc. Rather complex one actually, and despite development of better process control concepts for the core containment and circulation systems post Chernobyl era, we are still seeing accidents in modern plants, threatening radioactive leaks or meltdown. Some of the recent incidents have been in Swedish plants. And the reasons for these accidents weren't that the reactor was not modern super-safe reactor - they were a combination of wiring faults, installation faults and human error - all of which any new power plant will be subject to however you try to hype some revolutionarily safe reactor design. Engineering is not easy - and complex engineering doubly so - compromises are made - risks are taken - mistakes are made - especially now that we live in a world where everything must be made as cheaply and quickly as possible - where its fashionable to 'externalize' and 'outsource' responsibility and risk - which in practice ends up with multiple levels of convoluted subcontractors doing the actual work in the field...

Another issue with nuclear power's safety is the concept of 'risk'. What is an acceptable risk if the potential consequences are similar to Chernobyl? Finland is a small country and we cannot really afford to evacuate half of southern Finland for half-a-century - an area where over a million people live - quarter of our population - because of some 'risk' we took in order to have a few cents cheaper electricity. The risk might be very small but it is by no means non-existent - and the consequences are something we cannot afford to occur as a nation. Why risk the whole nation over somewhat cheaper electricity when there are numerous other ways of producing the same power without such overwhelming risks associated?

And before someone makes a specious analogy, trying to show that the concept of overwhelming risk leads of a paradox of inaction, let me make mine...

Gambling is generally perceived as being composed of odds of winning or losing. However it becomes more complex when you introduce the element of consequences. Normally you only consider the odds in gambling because the consequences of loosing are to do with loosing money, money which generally has relatively low opportunity cost to you - unless you are pauper with your last penny. However consider the game of Russian-roulette with money as award. The odds of winning or loosing suddenly matter very little when the consequence of loosing is death.

Nuclear power is like a game of Russian-roulette with the following rules. You often hear said that 'the chance of a nuclear accident is one-in-a thousand years'. Well then, running a nuclear plant for 30 years is much like taking 30 turns with a revolver with a thousand chambers, one loaded with a real bullet. Few people would play that game, whatever the reward. In the same way nations should not risk the lives of millions and the huge areas of productive land over any amount of cheaper electricity from nuclear power.

Now countering any attempt at specious analogies - the obvious one being that since 'anything' could be said to carry a risk, we are left with inaction... But you cannot say that other forms of energy production would carry such an overwhelming risk. There are risks and then there are overwhelming risks - much like the gambler with money to spare, and the starving pauper gambling away his last meal. The consequences of a coal power plant blowing up or solar panel falling on someone's head, are relatively common, in terms of odds and extent. They do not carry the threat of end of nations, and their consequences are minimal compared with everyday events: car accidents per population, or cancer etc. We do take overwhelming risks, such as driving a car daily, knowing that a possible consequence is indeed death by accident - yet that is a relatively small risk spread over our lifetime - compared to the buildup of multiple nuclear reactors to satisfy world's energy needs.

And to add to this, driving a car to work everyday for many of us is a necessity (at least in the short term, and because we live in the suburbs etc.), while building more nuclear power to produce cheaper electricity is a luxury we can live without - with various alternatives as discussed in TOD ad infinitum - starting not from the least: negawatts!

Nuclear power is like a game of Russian-roulette with the following rules. You often hear said that 'the chance of a nuclear accident is one-in-a thousand years'.

Its more like one in ten million with western plants. With many hydroelectric plants its one in 1000, and that leads to much more serious consequences than a nuclear power plant explosion. When a nuclear power plant blows up, you have a short term jump in thyroid cancers. When a dam breaks, tens of thousands of people just drown. This is just nuclear exceptionalism, as it ignores the risks of the rest of modern civilization that we live with every day, such as chemical plants, natural gas tankers, oil refineries, etc.

Nuclear power is simply among the safest of the heavy industries that we have, and the numbers back that up with the lowest per capita/KWh injury/fatality rates of any energy producing industry, but while everyone recalls the tragedy of Chernobyl, no one even pauses to consider the danger of hydroelectric dams. But if you're chance of cancer goes up by one in 100 from a nuclear power plant explosion, its an unacceptable risk, while we still dont require tobacco companies to refrain from using phosphate based fertilizers.

There seems to be a misallocation of priorities if you're actually concerned about risk.

The Dam was designed to survive a 1-in-1,000-year flood (306 millimeters (12 in) of rainfall per day).

Early Chinese dams are safer than Soviet RMBK reactors.

Thats not saying much. You're being argumentative without considering my point that western reactors are far safer than Banqiao was, and the consequences of the banqiao flood was far more dire than Chernobyl.

My point is we never even consider risks like Banqiao while we place the risks of nuclear power on a higher plane even though the consequences of failure are lower.

China in the early 1950s was a chaotic and desperately poor place. And in thew midst of early "land reforms" that would kill millions if not tens of millions. Hardly an ideal place to build any safe civil structure.

China in the early 1950s was a chaotic and desperately poor place. And in thew midst of early "land reforms" that would kill millions if not tens of millions. Hardly an ideal place to build any safe civil structure.

Banqiao was safe for the one in 1000 year flood, but the problem was:

In August of 1975, however, a 1-in-2,000 year flood occurred, poured more than a year's rainfall in 24 hours (new records were set, at 189.5 millimeters (7.46 in) rainfall per hour and 1,060 millimeters (41.7 in) per day, exceeding the average annual precipitation of about 800 millimeters (31 in))[1], which weather forecasts failed to predict[1][2], produced by the collision of Super Typhoon Nina and a cold front.

Are western reactors safer than modern western dams ?

Highly doubtful.

Western reactors are designed with millions of reactor years before catastrophic failure, where dams are designed for the tens of thousands. Given neither has had catastrophic accidents, we're arguing about the dancing angels. However we can easily project from Chernobyl and Banqiao which has the more catastrophic consequences.

No Western dam would have been designed with just 1,000 years and none that I know of are designed for only 10,000 years between failures. Designs are designed to overflow but not collapse (fail) in worst cases.

I think Chernobyl may have been worse than the dam failure. Certainly a larger area was contaminated.

Location and not technology is the delta. If Chernobyl had been in the midst of heavily populated Chinese farmland, the immediate and long term consequences would have been much worse than in Ukrainian farmland. Failure to evacuate was the cause of almost all deaths in China, not the technology.

I do think that modern Western dams are "real world" safer than modern western reactors.

Placing Chernobyl in a crowded Chinese agricultural area would have killed as many, and denied vital farmland for generations.

How? Certainly not the radioiodine toxicity from the Chernobyl statistics, and certainly not from subsequent cancers from the other isotopes either. While Chernobyl was tragic, it provided a wealth of data about the actual effect on populations of a nuclear accident, and its a clear sharp jump of thyroid cancers in a small percentage of an iodine deficient population with no statistically measurable increase in other types of mortality.

Nuclear power plants have a very low probability of failure, however, they also present the possibility of very large consequences of such failures. Years ago, there was a report from the U.S. NRC called "The Reactor Safety Study" (aka: WASH-1400), in which the risk of such failure was calculated using aerospace reliability techniques. The result was that the chance of an individual being harmed by a nuclear accident was so small as to be ignored, something like the chance of being hit by a meteor.

There were many reasons to question this result, such as the fact that most plants were one off designs and used equipment (such as valves) which was specially built for that plant. The failure statistics for such systems is rather meaningless if there's no test data available to quantify failure probability. With very few examples of the individual parts and little or no long term life time testing of such parts, the analysis relied on tests of similar types of equipment manufactured in large numbers. This sort of testing is routine for electrical parts, such as resistors, where good statistical characterization is possible. But, is that data truly representative of the failure rate of the equipment which was installed in the plant? Probably not.

Then, there's the human factor. A book from the 1980's called "Normal Accidents" (updated in 1999) presented several examples of human failure in complex systems. The author's thesis, as I recall, was that people tend to form a view of how a system is supposed to behave and then a set of unusual circumstances arrive, at which point, they can not see the problem, which leads to an accident. Perhaps a combination of several problems, each of which in itself is not catastrophic, when occurring at the same time produce failure. The Three Mile Island accident was one such event.

The Challenger accident at NASA was another similar situation, where record cold temperatures on the morning of launch put the system outside the range of temperatures for which the shuttle was designed. The engineers knew this could be a problem, but the managers did not heed their warning, which cost 7 people their lives, shutdown NASA for about a year and, incidentally, cost me a career. The funny thing was that we were researching failure analysis for the ISS at the time...

The author's thesis, as I recall, was that people tend to form a view of how a system is supposed to behave and then a set of unusual circumstances arrive, at which point, they can not see the problem, which leads to an accident.

This is the reason I think that a new-generation reactor should not share a control room or control staff with an older generation reactor.
It makes a lot of sense to build new reactors on existing plant sites(1), but it may be bad for uptime(2) if they share control infrastructure and operating staff.

1) Assuming, of course, that there is enough extra cooling water available at the site.
2) I sincerely hope this is not the understatement of the millennium.

U.S. oil demand during the first half of 2008 fell by an average 800,000 barrels per day (bpd) compared with the same period a year ago, the biggest volume decline in 26 years, the Energy Information Administration said on Tuesday.

There was an article in yesterday's Wall Street Journal claiming that the U.S. natural gas supply has essentially doubled due to the mastery of a technique for extracting unconventional gas from shale. The article also has natural gas company officials lamenting about a possible glut in supply as a result:

Looks like the 40-70% run-up over six months (depending on which contract) wasn't justified. I won't say "speculative" or "bubble" since I've been informed here that commodities don't react to such things. :)

But I also won't insist that my gas company bill me more this winter.

Other comments? Well... it may move coal gasification back and accelerate "plug-in" hybrids (or straight electrical vehicles) if electricity generation is substantially cheaper than using gasoline for the same task.

A new study from Navigant Consulting and the American Clean Skies Foundation (ACSF) suggests that the United States has ample supplies of natural gas in "unconventional" sources such as shale formations, coal beds, and so-called tight sands, which are geologic formations with low permeability to natural gas. The report finds the most potential in shale formations, estimating that the seven largest U.S. formations will yield at least 27 billion cubic feet (Bcf) of natural gas per day, equal to about 43% of the current natural gas consumption in the United States.

This came from an EIA emailing notice. This means unconventional will peak at half the current NG production rate. As conventional is falling, it seems that marketing has done a good job of selling a downturn as an upturn. "Go out and build more natural gas dependent devices because our natural gas production rate will fall to half!"

Quite Impressive. On the Marketing Side. ACSF is an NG industry lobby group.

For consumers, increased supplies of natural gas could mean lower heating and cooling bills, as the fuel generates a fifth of the nation's electricity and heats half of the U.S.'s homes. But any relief is likely to be limited. Analysts say that if natural-gas prices settle below $8 per million British thermal units, producers will cut back production -- which will tighten supplies and drive prices up again.

So 10 years ago gas production was $2.00 per mmBTU but today it is $8.00. This is falling EROI and why a 300% increase in natural gas prices still leaves the NG industry desperate for new buyers to prop up the prices further. Thus the marketing campaign. More power plants! CNG cars! NG Ethanol!

I looked at the article and tried to figure out what you were saying. As I understand it, what you are talking about is the "resources" that are close to double. Production is only up by about 8%.

Shale gas is one part of what we call unconventional natural gas. Unconventional natural gas production has been rising in recent years, and conventional has been declining. The combination in flat. Unconventional is a little like tar sands. There is a lot of it, but it getting it out may take many years. Peak oil is likely to adversely affect unconventional gas production, because it takes diesel to produce the unconventional gas.

I have written a couple of posts about unconventional gas, and probably should write a third one, talking a little more about future prospects. These are links to my previous articles:

Regarding the story at the top, "OPEC output hits all time record," I smell something fishy. The source of this pronouncement is the IEA, who told us in January and February that world petroleum production had reached 87 million bpd - yet later had to revise their figures downward. Gail the Actuary also posted a critical analysis of the excessively optimistic EIA production figures recently released.

I know that the US government and other agencies have lied about the true magnitude of manmade global warming for years. I also think it quite likely now that if we actually are at peak or starting to decline, the US government and other agencies will lie about this fact as long as they can. Is there any way to independently and reliably find out what is actually happening with world oil production? How much longer can this game continue?

I think the closest way we can "reliably find out what is actually happening with world oil production" is by monitoring a basket of oil spot markets prices as they seem to reflect the dynamic between supply/demand well enough, continue our resource-base modeling, and continue our well-placed skepticism of official reports/documentation. Other anecdotal evidence, such as the desperation shown by importing nations fatally dependant on oil, shold also be used.

Also tanker rates crashing. Altho if they go slow the rates will climb again = less oil being moved. Record production I don't think so. Most of OPEC's oil is shipped with tanker rates down hmmm.

WINTER is coming...

Also with the US demand destruction I am wondering how much of it has to do with the driving season "holiday period" which was easy to reduce consumption as apposed to winter which is much less so. Time will tell.

Cannot remember who this quote came from "You can avoid dealing with reality but you cannot avoid the consequences of not dealing with reality."

"It's very bizarre," says Jean de Cambry, a Belgian MSF veteran of crises from Sudan to Afghanistan. "It's so green. But you have all these people dying of hunger." The verdure around Kuyera is misleading. It is the product of rains in June, too late for the first of two annual crops. From January to May, the fields were parched and brown. And one failed harvest is enough to turn Ethiopia, a nation of 66 million farmers, into a humanitarian catastrophe.

...Ethiopia exemplifies the consequences of giving a starving man a fish instead of teaching him to catch his own. This year the U.S. will give more than $800 million to Ethiopia: $460 million for food, $350 million for HIV/AIDS treatment — and just $7 million for agricultural development. Western governments are loath to halt programs that create a market for their farm surpluses, but for countries receiving their charity, long-term food aid can become addictive. Why bother with development when shortfalls are met by aid? Ethiopian farmers can't compete with free food, so they stop trying. Over time, there's a loss of key skills, and a country that doesn't have to feed itself soon becomes a country that can't. All too often, its rulers use resources elsewhere — Ethiopia has one of Africa's largest armies.

Justices William O. Douglas and Hugo Black warned that nuclear power involved “a lighthearted approach to the most awesome, the most deadly, the most dangerous process that man has ever conceived.”

Dodge a bullet?

In 1966, a blockage occurred in the $100 million plant’s cooling system. Because it carried highly volatile liquid sodium, which can explode when exposed to air, all of southeastern Michigan stood at the brink of an unthinkable catastrophe. Police officials seriously debated evacuating Detroit, just 40 miles north.
But an explosion at Fermi would have permanently irradiated the Great Lakes and a gigantic area of land stretching hundreds of miles in all directions. Countless thousands of people would have died from both short-term and long-term radiation sickness. One actual victim from the releases that did occur may have been then-Vice President Hubert Humphrey, who spoke in Monroe the day after the accident and later died of cancer.

That's really lame. Nuclear power is very misunderstood. The term 'nuclear' scares the bejesus out of people because of the way it came about - a peaceful technology that arose from a destructive one. A relatively clean, safe technology that can provide nearly all the energy we need for a thousand years. Good luck doing that with the remaining stored solar energy and future solar. Like it or not, nuclear power is coming to a town near you.

Maybe the aversion is as much about the way Marie Curie died, as how those in Hiroshima and Nagasaki were vaporized or just withered and cankered for years. But to say that it's 'Peaceful' is to be ignorant of the ongoing cuddling between Military and Civilian uses of the Nuclear Infrastructure.

Of course, you've still got the recent leaks and failures at Dounreay, Scotland, in France last month, in Japan last year after the quakes.. and the construction quirks in Finland, just mentioned upthread. A cameraman I work with tells me he was the 'new kid' on a crew inspecting welded pipe headed for reactors back in the 70's, and he had to go back in and 'reject' the passed materials that his stoned superiors had sloppily glossed over during the shift. Gave him a pretty concrete reason to distrust the glowing promises of this supposed Thousand-Year Reich.

What could POSSIBLY go wrong, as the economy tightens, materials get pricier, more corners are cut, the unions unfold, the roads and bridges deteriorate, and the robust stability given to us by the Oil Century can no longer give us all those little extras any more?

Nuclear waste is highly toxic but extremely compact. The waste from all the energy a person would ever use in a lifetime would be the size of a coke can. Three tiny pellets of nuclear fuel (2mm x 1mm cylinders) can provide all the energy you use for a year. With coal, you would use the size of a football field 8ft deep in your lifetime. (source: The Power to Save the World: The Truth About Nuclear Energy by Gwyneth Cravens and Richard Rhodes). Think about all the pollution caused by burning coal and all the people that die from it each year, and the fact that it is causing climate change. Coal releases way more radioactive elements than nuclear. There's your waste, spread all over the atmosphere. Yet we are building more and more coal plants.

These so called radiation leaks that you are referring to are way overblown by the media. You get more dose from eating a banana. And smoking? Fuhgeddaboudit! There's radioctive elements such as radon in tobacco smoke. Like the equivalent of having a thousand chest x-rays a year? Then keep smoking! Then there's all the other sources of radiation that we're exposed to every day from microwaves, cell phones, radios, etc. Nuclear power is way way down the bottom of the list of things you should be worrying about.

Then come to the realization that wind and solar cannot possibly provide the amount of energy needed to replace ff and nat gas. You need base load power. Nuclear provides base load power. Once you reload the fuel, you fire it up and don't have to do much for 18 months. It's the greatest technology that humans have ever developed.

Except maintain a spinning reserve at least as large as the largest nuclear generator/plant (group of generators) on-line. This is FF generation running at part load or no load (400 MW coal plant generating 150 MW has 250 MW of spinning reserve). This means more FF generators are run at lower efficiency to support nukes.

"Even Saudi Arabia, whose record on capacity expansion plans has been superb, is facing questions over its ability to deliver," he notes. "The Khursaniyah expansion, which was due on-stream at the end of 2007, is now expected in mid-2009. Furthermore, there have been 'widespread reports of delays on start-up targets for the majority of its upstream program.'"

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